Written Answers Nos. 94-111
94. Deputy Brian Stanley asked the Minister for Finance the steps he will take to deal with the 38,000 mortgages that are in arrears of 90 days or more; and if he will provide reasonable protection for these borrowers. [7284/16]
View answer111. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to monitor the manner in which the various banks continue to accommodate customers who have found themselves in difficulty during the past number of years, with particular reference to the need to ensure a positive accommodation; and if he will make a statement on the matter. [7733/16]
View answer115. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the level of mortgage arrears continues to be managed in a way that is accommodating to the circumstances of the borrower; and if he will make a statement on the matter. [7737/16]
View answerI propose to take Questions Nos. 94, 111 and 115 together.
The Deputies will be aware that the Government strategy to deal with mortgage arrears has developed and been enhanced over recent years and additional measures have been introduced as the nature and circumstances of those in arrears has evolved.
Data released on 10th March 2016 by the Central Bank on Mortgage Arrears and Repossessions Statistics for quarter 4 of 2015 provided further evidence that progress is being made in addressing mortgage arrears. In summary, the position is: Quarter 4 2015 marks the tenth consecutive quarter of decline in the number of mortgage accounts for principal dwelling houses in arrears. This cohort has declined by 20 per cent relative to Q4 2014.
1. Over 120,730 PDH mortgage accounts were classified as restructured at end-December, reflecting a 5.3 per cent increase in restructured accounts relative to Q4 2014. 86.4 per cent of restructured accounts were deemed to be meeting the terms of their current restructure arrangement.
2. All maturity categories of arrears, including the over 720 days category, declined in Q4 2015, with the over 720 days category recording a second consecutive decline. Currently the number of PDH mortgage accounts in arrears for more than 720 days stands at 36,351.
Based on Central Bank data, mortgage accounts with no arrears now make up 88 per cent of all mortgage accounts. The continuing improvement in data trends shown in the Central Bank quarter 4 mortgage arrears returns are welcome and show that where there is meaningful engagement between lender and borrower, in the majority of cases an outcome that is beneficial to both parties can be reached.
In addition my Department continues to monitor and publishes Mortgage Restructures data on a monthly basis that covers mortgage accounts for the six main lenders. The figures in the latest publication for February 2016 (published on 14 April 2016) show that Primary Dwelling Home (PDH) mortgage accounts in arrears continue to decline and now stand at 67,234 representing an improvement of almost 21 per cent compared to February 2015.
The Deputies will also be aware that the Central Bank's Code of Conduct on Mortgage Arrears (CCMA) and the Consumer Protection Code provide a strong consumer protection framework to ensure that each borrower who is struggling to keep up mortgage repayments is treated in a timely, transparent and fair manner by lenders. The CCMA recognises that it is in the interests of borrowers and lenders to address financial difficulties as speedily, effectively and sympathetically as circumstances allow.
I would also refer Deputies to a new Government-funded scheme announced by the Minister for Justice in January to help people who are insolvent, and in mortgage arrears on their home, to access independent expert financial and legal advice. MABS will act as the gateway to refer eligible distressed borrowers to access this scheme.
In conclusion, I must reiterate that active engagement by indebted borrowers with their lender is key to achieving a sustainable resolution, and I would urge borrowers in arrears, who have not already done so, to take that first step by contacting their lender directly or MABS for an independent assessment of their situation and advice on available resolution options.
95. Deputy John McGuinness asked the Minister for Finance if a hard copy of a tax clearance certificate will be issued to a person (details supplied) in County Kilkenny. [7311/16]
View answerSection 95 of the 2014 Finance Act requires that all tax clearance certification must be provided via an electronic system with effect from 1 January 2016. The only exceptions in this regard relate to taxpayers who are not e-enabled, for example no technology access or suffer from an infirmity that restricts them from availing of electronic services.
The introduction of electronic tax clearance (eTC) means that taxpayers no longer need to provide a paper certificate to confirm tax clearance to a third party. Instead, it can now be verified by simply supplying a system generated 'Tax Clearance Access Number' in addition to the relevant PPSN to the third party in question. The eTC system is based on real time information rather than at a particular point in time like the old paper based system and where there are issues to be resolved, for example any outstanding tax payments and tax returns, the eTC system confirms the remedial action required of the taxpayer.
The eTC system, which can be accessed via ROS (business customers) or MyAccount (PAYE and non-ROS customers) has been developed to the very highest standards, is user-friendly and is fully secure. The system is available twenty four hours a day and can be accessed at a time that best suits individual circumstances. Revenue has advised me that it has published easy to follow instructions on its website at www.revenue.ie to assist taxpayers that may experience any difficulties. Revenue also provides telephone assistance via the Collector-General's Helpline at 1890 203070.
In regard to the specific case mentioned by the Deputy, Revenue has confirmed to me that the person in question successfully applied for tax clearance through the eTC system on 18 February 2016 and a 'Tax Clearance Access Number' was provided to him. He is not required to have a hard copy and if a third party has asked him to produce one he should provide the access number and his PPSN to confirm his Tax clearance status. He can also print the relevant details from his eTC record should he choose to do so.
96. Deputy Pearse Doherty asked the Minister for Finance to provide the moneys paid out by the Insurance Compensation Fund for each of the past five years; the amount that would have been paid out if the ICF had no caps, absolute or based on percentage, on payments for third party claims, in tabular form; and if he will make a statement on the matter. [7339/16]
View answerThe payments from the Insurance Compensation Fund outlined below were in respect of insurance undertakings in administration and consequently no caps or limits applied, with the exception of 2014. Payments in respect of that year included one claim relating to an insurance company in liquidation and thus the ICF limit of a maximum payment of 65% of the value of the claim or €825,000, whichever is lower, applied to the payment.
Payments made from the Insurance Compensation Fund 2011-2015
|
|
2011 |
2012 |
2013 |
2014 |
2015 |
|
Payments |
€331,173,695.00 |
€499,173,695.00 |
€350,000,000.00 |
€29,165.70 |
€275,207,542.48 |
|
Notional amount no cap |
No difference |
No difference |
No difference |
€42,640.00 |
No difference |
Note 1: The payments detailed above do not include costs/fees paid.
Note 2: The ICF payments were reduced in 2014 as no payments were required to be made in respect of Quinn Insurance (In Administration).
97. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 160 of 6 April 2016, if he will direct Allied Irish Banks, as a State-owned bank, to provide the information requested, namely, the value of approved mortgages that are outside the normal 80% cap for non-first-time buyers or the equivalent cap for first-time buyers under the Central Bank of Ireland's macro-prudential lending rules and to show this figure as a percentage of the total approved mortgages since the rules came into operation and as a figure for 2016 mortgages to date, in tabular form, as was provided by Permanent TSB in the same reply; and if he will make a statement on the matter. [7371/16]
View answerAs advised in answer to the Deputy's previous PQ, the Central Bank's macro-prudential limits on mortgage lending came into effect on 9th February 2015. The policy sets restrictions on the loan-to-value (LTV) and Loan-to-Income (LTI) ratios on products that can be offered by mortgage providers. There are a number of exemptions allowed for within the CBI guidelines, for example mortgage switchers or forbearance cases.
I must re-iterate that the macro-prudential limits on mortgage lending are designed, implemented and monitored by the Central Bank in its role as regulator of the Irish banking sector, and therefore fall outside of my remit as Minister for Finance. Moreover, the Central Bank does not provide prudential lending disclosures on an industry-wide or institutional basis and there is no regulatory requirement for AIB to publicly disclose the value of approved mortgages that are exceptions to the macro-prudential limits. My role as Minister of Finance, as set out in the Relationship Framework Agreements between the Minister and the banks in which the State is a shareholder, does not involve me in the relationship between the banks and their regulator. The Relationship Framework Agreement for AIB can be found here: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf.
Nonetheless, I have received assurances from AIB that the bank complied fully with Loan-to-Value (LTV) and Loan-to-Income (LTI) limits as set by the Central Bank of Ireland during the year to 31st December 2015, and that AIB continues to operate within the constraints set by its regulator.
98. Deputy Mick Wallace asked the Minister for Finance his views on the recent International Monetary Fund warning that banks following the international financial reporting standards are systemically overvaluing their loan portfolio by recording profits on non-performing loans (details supplied); and if he will make a statement on the matter. [7386/16]
View answerThe Deputy is aware that I have answered a number of Parliamentary Questions in the past in relation to rules adopted by banks when valuing assets including loans. These rules are determined by the relevant accounting standards and it is the responsibility of the directors of the respective banks to ensure these rules have been properly applied. To provide assurance that this is the case, the proper application of the rules is subject to an annual independent external audit review.
As I have stated in the past, nothing has been brought to my attention to suggest that these rules have not been correctly applied by the banks. Notwithstanding this, should the Deputy have concerns in this regard, he may wish to refer such concerns to the Irish Auditing and Accounting Supervisory Authority (IAASA), the independent body responsible for the examination and enforcement of certain listed entities' financial reporting.
Finally, the requirement for banks to prepare financial statements is laid out in the Companies Acts. The Companies Acts come under the scope of the Department of Enterprise, Trade and Innovation. The Director of Corporate Enforcement has widespread powers and functions in relation to potential breaches of the Companies Acts.
99. Deputy Brendan Griffin asked the Minister for Finance if he will examine ways of reducing the tax component of residential rental prices to ease the burden on renters; if an emergency finance Bill will be considered to implement such a measure to allow these reductions to be passed on to renters immediately; and if he will make a statement on the matter. [7410/16]
View answerAccording to the Private Residential Tenancies Board, rents increased 9.8 per cent on an annual basis in Q4 2015. At a regional level annual growth in the Dublin market was 9 per cent in Q4 2015. Similar rental inflation was experienced outside of Dublin with rents increasing by 9.9 per cent compared with Q4 2014.
The indications are that this increase is being driven by an excess of demand over the available supply in the market. For example, the Daft Rental Report for Q4 2015 noted that rental inflation has been driven by a shortage of rental properties. This lack of availability is primarily attributed to the current housing output falling short of the demand for housing. Forecasts for housing demand suggest that an average of around 25,000 units are required annually over the medium to longer term. At present, the sector is falling well short of this target with completions in 2015 of just over 12,500 units.
In such market conditions, it is likely that a reduction in the tax payable by landlords, such as that proposed by the Deputy, could lead to increased profit for landlords rather than a reduction in rent paid by tenants.
It must also be noted that the level of income tax payable by a landlord in respect of a given amount of rental income can vary significantly, depending on the level of deductible expenses incurred by the landlord. For example, in the case of rental investment properties which have been purchased using loan financing, it could be expected that the net taxable rental income from a newly-purchased property would be much lower than the net income from an equivalent property owned for a longer term by the landlord, as the deductible interest expense incurred would be higher.
With regard to rented residential premises, a landlord may, in general, deduct 75% of the interest paid on borrowed money used to purchase, improve or repair rented premises when calculating rental income. The cost to the landlord of any goods provided or services rendered to a tenant and the cost of maintenance, repairs, insurance and management of the property are deductible. Wear and tear allowances are also available in respect of expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation.
The Deputy will also be aware that I introduced in Finance Act 2015 a new tax relief which allows a full 100% mortgage interest deduction where a landlord undertakes, for a period of at least three years, to provide accommodation to tenants in receipt of social housing supports. The relief is designed to incentivise landlords to commit to letting their property to tenants in receipt of social housing supports over the longer term, thereby improving the stability of supply of property to such tenants.
This relief was one element of an overall package of measures designed by the Government aimed at stabilising rent and boosting supply in the housing market which, in my view, was the most appropriate and effective route to addressing rental price increases driven by supply constraints.
100. Deputy Jim Daly asked the Minister for Finance the number of instances between 2000 and 2014, inclusive, in which tax relief on pension contributions paid in during the period of their assignment abroad was granted under section 774(7)(d) of the Taxes Consolidation Act 1997, either through carrying forward or refunding, to executives of State agencies who had served abroad under identical conditions; the number of instances where this tax relief was denied; and if he will make a statement on the matter. [7433/16]
View answer101. Deputy Jim Daly asked the Minister for Finance if, within the cohort of executives of State agencies who served abroad under identical conditions, some were granted tax relief on pension contributions paid in during the period of their assignment abroad, by carrying forward or refunding, under section 774(7)(d) of the Taxes Consolidation Act 1997 while others were denied the same benefits; and if he will make a statement on the matter. [7434/16]
View answerI propose to take Questions Nos. 100 and 101 together.
These questions both relate to the carry forward of tax relief on pension contributions under the provisions of section 774(7)(d) Taxes Consolidation Act 1997; I propose taking them together.
I am informed by the Revenue Commissioners that section 774 of the Taxes Consolidation Act, 1997 provides tax relief for contributions by an employee to an occupational pension scheme against tax due in respect of the remuneration of the employment in relation to which the scheme is effected. In this regard, section 774(7)(a) provides that relief for ordinary annual contributions is given by way of a deduction in determining the employee's income tax liability under Schedule E for the year in which the contributions are paid.
Relief for an employee's ordinary annual contributions is normally provided by an employer under what is known as the net pay arrangement whereby the contributions are deducted from gross remuneration before tax under Schedule E is calculated. In the case of special contributions, relief is normally granted by way of a claim made by the taxpayer to Revenue after the end of the relevant tax year.
In any tax year, the amount of contributions on which relief can be granted to an employee is limited to an age-related percentage of the employee's remuneration from the office or employment in respect of which the contributions are paid (subject to an overall annual earnings cap, which currently stands at €115,000).
The age-related percentages are as follows:
|
Age |
% of Remuneration |
|
Under 30 |
15 |
|
30 to 39 |
20 |
|
40 to 49 |
25 |
|
50 to 54 |
30 |
|
55 to 59 |
35 |
|
60 or over |
40 |
Where a person's contributions in a year exceed the amount on which relief can be granted (based on his or her age-related percentage limit or the overall earnings cap as appropriate), section 774(7)(d) provides that the unrelieved amount is carried forward and treated as a contribution made in a later year or years.
The carry forward of unrelieved contributions under section 774(7)(d) is provided for only in cases where an individual's pension contributions in a year exceed the amount for which relief can be granted in that year. It is not provided for in any other circumstances.
In relation to the specific questions the Deputy has posed regarding the number of instances where this relief was granted by way of carry forward or refunded to executives of State agencies during the period of their assignment abroad, data are not collected in respect of section 774(7)(d) in a manner which enables Revenue to isolate these claims or the amounts associated with this particular aspect of the relief.
Finally, if the Deputy's query concerns a particular individual then that individual may wish to contact his or her local Revenue office who should be able to assist in any queries they may have with regard to the operation of section 774(7)(d).
102. Deputy Finian McGrath asked the Minister for Finance to review the local property tax in order to make it a fairer system (details supplied); and if he will make a statement on the matter. [7436/16]
View answerRevenue provides a wide range of payment and phased payment options that allow property owners to meet their Local Property Tax (LPT) obligations in a manner that best suits individual circumstances. One of the available phased payment options is Deduction at Source from ten separate payment schemes operated by the Department of Social Protection (DSP).
The Deputy should note that deductions are not taken from Jobseekers Allowance as the temporary and intermittent nature of the allowance could result in shortfalls in the amount of LPT deducted leaving property owners with outstanding liabilities at year-end. Also, the concept of a de minimis welfare payment from the Department of Social Protection (DSP) is enshrined in social welfare legislation and deductions that would have the effect of reducing a person's take-home amount to below the minimum weekly rate of supplementary welfare allowance, currently €186 per week, cannot be made. In regard to the operation of "deduction at source" (DAS) from DSP payments, it has been ensured, through ongoing dialogue between Revenue and DSP officials, that individuals impacted by the €186 threshold are given early notification that Local Property Tax (LPT) payments cannot be deducted and alternative payment methods are put in place.
In cases where LPT cannot be deducted from DSP payments, there are other phased payment options available to assist property owners in spreading the liability over the course of the year. These options include monthly Direct Debits through banks and certain credit union accounts and flexible payments through four approved Payment Service Providers including An Post, Payzone, Omnivend and PayPoint. Each of these service providers applies various transaction charges that are outside of Revenue's control.
The option to defer payment of LPT is provided for in Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) including full Deferral and Partial Deferral (50%) of LPT liabilities for property owners meeting certain conditions including 'Income Level', 'Hardship', 'Personal Insolvency' and 'Personal Representative of a Deceased Person'. The income threshold for a full deferral is €15,000 (single person) per annum and €25,000 (couple) per annum and for a partial deferral is €25,000 (single person) per annum or €35,000 (couple) per annum. These thresholds can also be increased by 80% of any gross mortgage interest payments. However, 'Deferral' and 'Partial Deferral' are not exemptions and the tax becomes payable at a later date and carries an annual interest rate of 4%.
Any property owners who wish to apply for a 'Deferral' or 'Partial Deferral' can access their records online at www.revenue.ie and amend the payment instruction as required. Alternatively they can contact the LPT Helpline at 1890200255 where an agent will confirm any balances due and assist with making alternative payment arrangements, including Deferral/Partial Deferral as necessary.
I engaged Dr Don Thornhill to consider the operation of the Local Property Tax, in particular, any impacts on LPT liabilities due to recent property price developments. In his report on his review of the Local Property Tax - which was published on Budget Day 2015 - Dr Thornhill made a number of recommendations including that the existing deferral provisions should be continued and be reviewed and revised at frequent intervals. Dr Thornhill also recommended that for owner-occupiers over 80 years of age or those with stated certified long term illnesses and disabilities who are living alone, consideration be given to raising the income limit for deferrals to €20,000.
In my Budget 2016 statement, I announced that I would be proposing to Government that the revaluation date for the LPT be postponed from 2016 to 2019. This postponement means that home owners will not be faced with significant increases in their LPT in 2017 as a result of increased property values. The postponement also gives sufficient time for the other recommendations in Dr Thornhill's report to be considered fully by the next Government.
The Finance (Local Property Tax) (Amendment) Act 2015 gives effect to the postponement of the revaluation date of residential property for LPT purposes, and also to two of the recommendations in Dr Thornhill's report, involving LPT relief for properties affected by pyrite and relief for properties occupied by persons with disabilities (recommendations numbers 11 and 12 respectively).
As I have indicated, issues relating to the implementation of other recommendations in the Report will be a matter for further consideration.
103. Deputy Finian McGrath asked the Minister for Finance his views on correspondence regarding mortgage difficulties for a person (details supplied) in Dublin 5; and if he will make a statement on the matter. [7437/16]
View answerAs the Deputy is aware, I, as Minister for Finance, have no direct function in the relationship between EBS (a subsidiary of AIB) and its customers. Notwithstanding the fact that the State is a significant shareholder in the institution, the Minister must ensure that the bank is run on an independent basis to ensure the value of the bank as an asset to the State. It would therefore be inappropriate for me to intervene in any particular case. A Relationship Framework has been specified that defines the arms-length nature of the relationship between the Minister for Finance and the bank. These Frameworks were published on 30 March 2012 and the AIB Relationship Framework can be found at: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf.
While it is not possible for me to comment on the position of an individual customer, in the vast majority of cases the best course of action is to engage directly with the bank to establish the status of the mortgage in question and come to a realistic and sustainable repayment arrangement. If an EBS customer is not satisfied with their financial service provider's decision(s) they can make a complaint to AIB Customer Support Centre, Bankcentre, Ballsbridge, Dublin 4, using the internal formal complaints procedure. Should this process come to a conclusion which they are not satisfied with, they may wish to refer the matter to the Financial Services Ombudsman to have it independently investigated. The Financial Services Ombudsman can only take on complaints when the lender's appeals process has first been exhausted. Contact details are as follows: Address: The Financial Services Ombudsman, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2. Lo call 1890 88 20 90; Email - enquiries@financialombudsman.ie. Website: www.financialombudsman.ie.
Separately, confidential and independent advice on money and debt issues is available free of charge from MABS advisers (MABS Helpline, lo call 1890 283 438, Monday to Friday 9am to 8pm, www.MABS.ie). They can help ensure that customers are fully aware of their rights and responsibilities in dealing with mortgage arrears difficulties.
104. Deputy Éamon Ó Cuív asked the Minister for Finance the regional breakdown of all members appointed by the Government or him to State boards, agencies and bodies in 2015 and to date in 2016, by agency and by region (details supplied); and if he will make a statement on the matter. [7478/16]
View answerIn response to the Deputy's query, please see below a regional breakdown of members appointed to bodies under the aegis of my Department in 2015 and to date in 2016.
|
Body |
Appointee Name |
Appointed |
Region |
|
Central Bank Commission |
John FitzGerald |
Re-appointed 1/10/2015 |
Dublin |
|
|
Alan Ahearne |
Re-appointed 8/03/2015 |
Connacht |
|
Philip Lane |
Appointed 21/10/2015 *in advance of commencing as Governor |
Dublin |
|
|
|
|||
|
Financial Services Ombudsman Council |
Dermott Jewell (chairman) |
Re-appointed 29/10/2015 |
Dublin |
|
|
Paddy Leydon |
Re-appointed 29/10/2015 |
Connaught |
|
|
Frank Wynn |
Re-appointed 29/10/2015 |
Dublin |
|
|
Caitríona Ní Charra |
Re-appointed 29/10/2015 |
Connaught |
|
|
Michael Connolly |
Re-appointed 29/10/2015 |
Dublin |
|
|
Elizabeth Walsh |
Re-appointed 29/10/2015 |
Munster |
|
|
Tony Kerr |
Re-appointed 29/10/2015 |
Dublin |
|
|
Valerie Bowens |
20/01/2016 |
Dublin |
|
|
Deborah Reidy |
20/01/2016 |
Munster |
|
|
Ken Murnaghan |
20/01/2016 |
Dublin |
|
|
|||
|
Irish Fiscal Advisory Council |
Dr Íde Kearney |
11/03/2015 |
Other |
|
|
Michael G Tutty |
Appointed 24/09/2015 Re-appointed 01/01/2016 |
The rest of Leinster |
|
|
Seamus Coffey |
01/01/2016 |
Munster |
|
|
|||
|
Office of the Appeal Commissioners |
Mark O'Mahony |
09/11/2015 |
Dublin |
|
|
Lorna Gallagher |
21/12/2015 |
Dublin |
|
|
|||
|
Strategic Banking Corporation of Ireland |
Ann Nolan |
12/03/2015 |
Dublin |
|
|
Tom McAleese |
24/03/2015 |
Dublin |
|
|
Barbara Cotter |
18/03/2015 |
Dublin |
|
|
AJ Noonan |
18/03/2015 |
Dublin |
|
|
Eilis Quinlan |
18/03/2015 |
The rest of Leinster |
|
|
Richard Pelly |
18/03/2015 |
Other |
|
|
Rosheen McGuckian |
27/03/2015 |
Dublin |
|
|
Conor O'Kelly (Chairperson) |
12/03/2015 |
Dublin |
|
|
|||
|
The Investor Compensation Company Ltd. |
Enda Newton |
19/10/2015 |
Dublin |
|
|
Siobhán Madden |
19/10/2015 |
Dublin |
|
|
Valerie Bowens |
19/10/2015 |
Dublin |
105. Deputy Brendan Griffin asked the Minister for Finance if he will take action to scrap value added tax payable on defibrillators, or the automated external defibrillator, in recognition of the life-saving potential of such pieces of equipment, for which many community groups are struggling to fund-raise to purchase; and if he will make a statement on the matter. [7591/16]
View answerThe VAT rating of goods and services is constrained by the requirements of EU VAT law with which Irish VAT law must comply. Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, currently 23%. Parts or accessories and training are also liable to VAT at the standard rate.
There is no provision in VAT law that would make it possible to apply a reduced rate or zero rate to the supply of such products. Under the EU VAT Directive, Member States may retain the zero rate on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. In addition, Member States may only apply a reduced VAT rate to those goods and services which are listed under Annex III of the VAT Directive. While Annex III does include the supply of medical equipment for the exclusive personal use of a disabled person, it does not include defibrillators for general use. In this regard, a reduced rate cannot be applied to the supply of defibrillators. Therefore the only rate that can apply to the supply of defibrillators and their accessories is the standard VAT rate of 23%.
106. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) regarding credit unions; and if he will make a statement on the matter. [7617/16]
View answerMy role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and the Minister for Finance work together for the safety of members' savings and the security of the credit union sector.
A number of matters have been raised in this question which I will address in the order in which each was asked.
- The Department has received a number of social housing proposals which are at various stages of development. The Department of the Environment, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and for the preparation of legislation in relation to housing. It must be pointed out that any such proposal, including the funding of SMEs will ultimately be a matter for regulatory approval by the Registrar of Credit Unions.
- The Personal Microcredit Scheme was commenced on a pilot basis in November 2015. 30 credit unions are involved in providing individual loans of between €100 and €2,000 with a maximum interest rate of 12%. The initiative is being led by the Department of Social Protection in conjunction with the Department of Finance and other interest groups. Monitoring data are being collected on a regular basis which will inform the structure and support necessary for a national roll-out.
- The Credit Union Advisory Committee (CUAC) is currently carrying out a review of implementation of the recommendations of the Commission on Credit Unions. This report is due to be completed by end June 2016.
- The Government provided €250 million in the Credit Union Fund. This funding is ring-fenced specifically to provide financial support for credit unions restructuring under the Credit union Restructuring Board (ReBo). The terms of the Restructuring Scheme, agreed between the Department of Finance and DG Competition at the European Commission, are specific to restructuring credit unions and are measures granted under a State aid scheme. There is no flexibility within the Scheme to provide funding for any measure other than restructuring.
- The Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank, building society or credit union, authorised by the Central Bank of Ireland being unable to repay deposits. The DGS protects depositors up to €100,000 per person per institution. While Article 13(1) of the DGS Directive states that Member States may provide for lower contributions for low-risk sectors regulated under national law, this must be read in conjunction with the entirety of Article 13 and, in particular, Article 13(2) which states that the method for calculating contributions to the DGS shall be approved by the competent authority which is the Central Bank, in co-operation with the designated authority, which also is the Central Bank. In accordance with the requirements of Article 13, the European Banking Authority (EBA) issued guidelines on methods for calculating contributions to DGSs. Competent authorities must ensure that these guidelines are applied by DGSs when developing methods for calculating risk-based contributions by their members. The Central Bank as the competent authority has indicated that it intends to follow those guidelines. I have been informed by the Central Bank that the calculation methodology currently being developed will assess and rank each credit institution separately. Therefore, individual credit unions will be separately assessed and ranked, and those deemed to be lower risk under the risk categories as set out in the EBA guidelines will pay a lower contribution. Conversely, individual credit unions deemed to be higher risk under these risk categories will pay a higher contribution. It is important to highlight that neither the Minister for Finance nor the Central Bank can act outside the parameters of Article 13 as a whole, which gives the Central Bank the mandate to determine and calculate risk based contributions.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to continue to support a strengthened and growing credit union movement.
107. Deputy John Halligan asked the Minister for Finance further to my many written questions on this issue to confirm if there has been any update in relation to the Setanta Insurance issue following the recent decision indicating that claims should be made through the Motor Insurers' Bureau of Ireland; to confirm if he has received a clarification relating to this decision being appealed; and if he will make a statement on the matter. [7622/16]
View answerAs the Deputy is aware, progress on the Setanta Insurance issue has been awaiting the outcome of legal proceedings in the case of the Law Society of Ireland versus the Motor Insurers' Bureau of Ireland (MIBI). On 4 September 2015, the High Court held that the MIBI is liable in respect of claims against the policy holders of Setanta. This decision was subsequently appealed by the MIBI and the Court of Appeal upheld the High Court decision in the case. The MIBI has announced that it has decided to apply to the Supreme Court for leave to appeal the Court of Appeal judgement.
I expect to be in a better position to inform the House further after the legal proceedings are concluded.
108. Deputy Dara Calleary asked the Minister for Finance the total rate of credit lending to small and medium enterprises via the Strategic Banking Corporation of Ireland; the total level of take-up from the fund by businesses at 31 December 2015 and in quarter one of 2016; and if he will make a statement on the matter. [7654/16]
View answerThe Strategic Banking Corporation of Ireland (SBCI) began lending in March 2015. Its goal is to increase the provision of funding to SMEs at a lower cost and on more flexible terms than has been available in recent times on the Irish Market. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank on-lending partners and two non-bank on-lending partners.
The SBCI publishes results bi-annually. To the end of December 2015, the SBCI has lent just under €172 million to circa 4,600 SMEs. The average loan size was €37,000 and the loans were for a variety of purposes including investment, working capital and refinancing. The SMEs who received SBCI finance were from a variety of business sectors. 85% of the lending was to SMEs based outside of Dublin (West 13%, Midlands 7%, Mid West 14%, South West 19%, South East 11%, Mid East 10%, border region 11%). The SBCI will publish half year results at the beginning of the third quarter of 2016 for the first half of the year.
109. Deputy Jackie Cahill asked the Minister for Finance if he will revisit the decision to impose a 1% levy on track bookmakers who have a remote licence; if he will consider spreading the burden more evenly over the industry, particularly to online betting; and if he will make a statement on the matter. [7702/16]
View answerLicensed bookmakers and remote bookmakers are liable to 1% betting duty on the value of all bets accepted in a registered bookmaking premises and on the value of all bets accepted by internet, phone or other electronic means from persons in the State.
Betting duty is not charged on bets accepted on-course by a licensed bookmaker at an authorised racecourse during race meetings. However, where bets are entered into by the on-course bookmaker by any means of telecommunications, these bets are liable to betting duty at 1% of the value of the bet.
110. Deputy Jackie Cahill asked the Minister for Finance the status of a claim for a tax rebate by a person (details supplied) in County Tipperary; and if he will make a statement on the matter. [7703/16]
View answerI am advised by Revenue that there is no outstanding claim for a tax rebate from the person concerned. The person concerned was advised in writing by Revenue last September of the position as regards his rebate claims at that time and any refunds due issued then.
